Mortgage on high rise flat

What is a high rise flat?

A high rise flat differs in definition from a mortgage lender to another mortgage lender and this makes it hard to know how to shop or who to approach. Your mortgage lender will be able to advise you on what different mortgage lenders consider as a high rise flat and if it is likely you may be able to get a mortgage on a high rise flat.

Mortgage lenders will rarely lend on ex-local authority high rise flats and high rise flats with concrete constructions.

Getting a mortgage on a high rise flat

Mortgage on high rise flats can be very hard to get and you won't find too many mortgage lenders willing to offer these mortgages.

Mortgage lenders find it hard to lend in high rise flats due to the safety concerns( e.g fire prevention and containment concerns) and their suitability as residences.

Mortgage lenders do not just limit their reservations to residential high rise flats but also have the same reservations for high-rise student accommodation, care homes, hotels and mixed-use properties.

Many lenders will not lend on blocks over four or five storeys; and, while some will lend on blocks with more floors, they will require that those properties have a lift.

Another significant reason why mortgage lenders find it hard to lend on high rise properties is the change in buyer demands which could easily create a devaluation on high rise flats all over the UK and cause mortgage lenders who have loaned on thousands of these buildings to be out of pocket.

Mortgage lenders also remember too keenly how they all lent on high rise flats in the early 2000s and then the property crash came and wiped away all their earnings on high rise flats.

Most high rise flights have since fallen into a state of decay, they are barely managed and whenever they sell they keep to be going downward in pricing due to the state they are left in.

Most mortgage lenders also insist that you have adequate home insurance before they will agree to release mortgage funds. Getting home insurance on a high rise can be very difficult as they are classed as “ builds”. This means you could potentially face paying way over the odds than you would have for a similarly priced house.

Mortgage lenders are also very keen not to lend on high rise flats from ex-local authorities, but why?

Ex local authority multi-stories are pretty much unmortgageable de to the risk of very high service charges when they decide to replace the lifts, replace the common dwelling areas replace the cladding for fire safety etc

Even without the risk of developments, high service charges are a common theme amongst local authority flats.

Due to this buyers don't like these sort of properties and this creates a reduced amount of demand for them.

Mortgage lenders are conscious of this reduced demand and will, therefore, refuse to lend on ex-local authority high rise flats as if they repossessed the home they may find it harder to sell and recoup the mortgage.

You will notice that most ex-local authority high rises will advertise as “cash buyers only” because they are aware of how hard it is to get a mortgage for this type of property.

Can you get a mortgage on a high rise flat?

Yes, you can get a mortgage on a high rise flat but these mortgages are very difficult to get and there are very few mortgage lenders who may consider lending against an apartment in a property that is over six or seven storeys high, particularly if you're looking to buy outside the greater London area.

Below is a list of what some mortgage lenders view as high rises.

Barclays

Maximum seven storeys

Bluestone Mortgages

Maximum 10 storeys

Buckinghamshire Building Society

Maximum four storeys but up to 20 storeys in London

Halifax

No maximum height on the building but lending is subject to a valuer’s comments

Kensington Mortgages

Maximum 10 storeys

Kent Reliance

Maximum six storeys but up to 12 in London

Leeds Building Society

Entirely down to valuer’s comments

Metro Bank

No maximum, down to valuer’s comments

NatWest

No maximum, down to valuer’s comments

Nottingham Building Society

Maximum 10 storeys

Platform (part of Co-operative Bank)

Maximum 10 storeys

Precise Mortgages

Maximum 20 storeys

Santander

Maximum seven storeys, but can increase this in London

TSB

Down to valuer’s comments

Virgin Money

Maximum of five storeys but up to 10 in London

Your ability to get a mortgage on a high rise flat will be judged in the same way as any other mortgage, excluding the property.

This means the mortgage lender will want to see your proof of income, your credit history and credit score.

You may submit payslips, bank statements, tax returns, letters from accountants as your proof of income.

The mortgage lender will usually get a copy of your credit score when you request an agreement in principle or just before they give you a [mortgage offer](https://blog.huuti.co.uk/mortgage-offer/)

Getting a mortgage on a high rise flat with bad credit

As you can imagine getting a mortgage on a high rise flat with bad credit might be much harder than expected and you may not find too many mortgage lenders who are willing to lend to you on a high rise flat.

Bad credit could include:

Government schemes for high rise flats

  • Lifetime ISA- gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
  • Help to buy ISA- gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy- allows you to buy your home at a discount price.
  • Preserved right to buy- same as above.
  • Right to acquire- same as above.

You may also be able to use a host of mortgages with the help of your family.

They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the lloyds lend a hand mortgage or the post office family link mortgage.